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<br />'. <br /> <br />. <br /> <br />Discussion <br /> <br />Staffhas reviewed, in varying levels of detail, the planning studies prepared for the <br />Plateau Creek Pipeline project over the last eleven years, In May of 1998, staff prepared a <br />report summarizing that review. In support of the present funding request, the District <br />prepared a packet of financial and technical infonnation, which has also been reviewed <br />by CWCB staff, Based on these reviews and analyses, staff has concluded that the <br />Plateau Creek Pipeline project is economically, financially and technically feasible. <br /> <br />Both the 1988 and 1999 authorizations for the project represent a level of CWCB funding <br />at 50 percent of total project costs, Staff recommends continuation of the same level of <br />funding using the most recent cost estimate of$55.36 million, Fifty percent of this figure <br />would amount to $27.68 million. Subtracting the $17.6 million previously authorized <br />would imply an increase of about $10.0 million in the project authorizations, <br /> <br />. <br /> <br />A 1990 median household income (MID) estimate for the District's service area is not <br />available, For Mesa County, MHI for 1990 was $23,698, which may provide a reasonable <br />estimate for the Ute service area, This would also imply a low-income lending rate for <br />this loan, Staff believes, however, that the majority of the development that has occurred <br />within the District in the last nine years is not low-income in nature, (According to <br />information provided by the Division of Local Government, 1993 MHI for Mesa County <br />was $28,089,) Staff will therefore recommend the Municipal Standard (or middle <br />income) rate of 5,0 percent for a 30-year term for this additional increment of funding, <br /> <br />The loan contract would be with the Ute Water Conservancy District acting by and <br />through its Ute Water Activity Enterprise, Pursuant to Amendment One, the Enterprise <br />currently receives less than ten percent of total annual revenues in taxes and has the <br />ability to incur multi-year indebtedness and to issue its own revenue bonds, <br /> <br />Recommendation <br /> <br />Staff recommends that the Board request an increase of$10,000,000 in the Ute Water <br />Conservancy District's 1999 authorization for the Plateau Creek Pipeline Replacement <br />Project. Staff proposes that the entire $10,000,000 be funded from the Perpetual Base <br />Account of the Severance Tax Trust Fund, The $10,000,000 increment of additional <br />funding would be for thirty years at a lending rate of 5.0 percent. <br /> <br />Total lending (Construction Fund and Severance Tax Trust Fund) for the project would <br />amount to $27,600,000 not to exceed 50 percent of total project costs. As security for the <br />loan, the District and the Ute Water Activity Enterprise will pledge water system <br />revenues and the Plateau Creek Pipeline Project. <br /> <br />Staff further recommends that: <br /> <br />. <br /> <br />1. The boards of directors of the Ute Water Conservancy District and the Ute <br />Water Activity Enterprise will adopt a resolution or resolutions approving the <br /> <br />5 <br /> <br />-~~ <br />